This is an excellent article by Martin Bright in the Spectator on Youth Unemployment. Check it out!
I very much endorse the following viewpoint proposed by Martin Bright:
Unemployed graduates in particular should be encouraged to set up their own businesses: to my mind this is where any large-scale pump priming from state funds should take place. I would also like to see the Downing Street nudge unit delivering a huge poke in the ribs to the banks to persuade them to invest in graduate start-ups.
What do you think?
Big business still have their milk rounds for graduates and take some of them on.
The Government needs to put a lot more pressure on Big Business to take on more graduates in proper roles commensurate with their levels of potential and skill but has chosen not to do so.
It should also encourage wealthy inward investors to take on graduates in particular jobs as a precondition for gaining citizenship and getting personal tax breaks.
If enough of this was done, Big Business would be forced to compete and if it tried to bring in more EC migrants I would set the bar much higher in terms of income (So far the Government has set it at £31,000 gbp per year), whereas if one set it at £100,000 gbp the flow would practically stop.
Similarly all immigration from outside the EC needs for the next 10 years to be stopped.
If firms left the UK we should let them go but attract new foreign companies using money we currently waste on overseas aid, foreign wars like Afghanistan, interference in the affairs of other countries where we have no business, maintaining outmoded institutions, year long ceremonies which serve no useful financial purpose and white elephants such as the Scottish Parliament and the Welsh Assembly.
The overseas work should be secondments with a contractual obligation to learn a useful foreign language and repatriate a specified proportion of income so that the money does eventually come back to the UK.
There is no guarantee at present that someone simply encouraged to work overseas will repatriate money back to the UK as I know from my own experience of moving to America and living there so something along these lines would have to be put in place.
In addition the UK tax system needs to be made much more entrepreneur friendly before repatriation of tax could be assured and before new business startups can be made to last.
Along with this we need to see why it is that US based VCs on Sand Hill Road,Palo Alto, California and in Boston, New York and elsewhere provide funding to five times as many start ups as their UK counterparts.
Graduates from Cambridge University who create “spin outs” and high tech businesses based in the St John’s Innovation Centre on the Cambridge Science Park find that MIT students in America get 5 times as much funding in proportion with their size.
During my visit to Wuxi, China during the summer of 2011 I saw the level of support given to start ups there both in terms of rent free offices, a favourable tax regime and help from the Regional Government with personnel, research and the finding of customers through business matching.
Therefore the Government needs to encourage foreign VCs to operate over here on a bigger scale so that businesses started by our graduates get off the ground and prosper rather than folding up for lack of funding.
I think we agree that the “WORK PROGRAMME” is not working and on your last two points about non military national service programmes.
John, thanks I agree with most of your last post but am not sure about controls on immigration. Immigration controls is such a sensitive subject that it needs proper debate and perhaps even a referendum.
Thanks John. Let’s see what happens!
WHERE GRADUATES SHOULD BE EMPLOYED
I disagree – unemployed graduates should be employed by the Times 1000 and by hypergrowth companies and the Government.
To do otherwise is a waste of the money we have invested in their higher education and that they and their parents have invested via tuition fees.
We need our best brains running the country and our biggest and most promising firms so the place to put these graduates is in those organisations coming up with new ideas and eventually moving into the top slots when they are ready.
Businesses should be started by less academic youngsters of a more practical bent because the manufacturing jobs which they used to be able to do are now being done in Poland, Hungary, China, Indonesia and South Korea or are being completed by industrial robots of the kind that exist at Longbridge, Swindon, Derby and the North East where Nissans are made.
The rest of these youngsters should be taught languages and a saleable skill and encouraged to seek their fortunes elsewhere.
THE WORK PROGRAMME
Moving on to the Work Programme, it should be remembered that every single one of these programmes which are all based on the Australian welfare to work programme at Mount Drewett and the American Workfare programmes under Bill Clinton have failed.
This is because of the failure of Government Ministers, Lord Freud the City grandee and the civil service mandarins to understand how ordinary people and benefit recipients think and live.
They also do not understand the arithmetic of the employment market in relation to what UK employers are prepared to do and immigration from Eastern Europe which will continue for as long as we remain in the EC.
Some facts will shed light on the situation:
1)80% of new jobs go to people of Eastern European and foreign descent. Employers like them because they are better educated, better motivated, more industrious and more efficient than youngsters from this country who the education system has failed. At least one school leaver in 7 cannot read, write or communicate rising to 1 in 5 in the Fens and deprived areas on sink estates.
In my own town Tesco were sacking British workers, particularly lorry and van drivers, unofficially and replacing them with people from Eastern Europe.
2)Manufacturing which used to employ young men and woman from socio economic groups C1,C2,D, and E now constitutes 8% of all economic activity and what used to be there is now in the Pearl River Delta and elsewhere where productivity levels are much higher than the UK’s lacklustre figure of 60% which is 15th in the global league table and therefore insufficient for retention of those jobs.
3)Levels of unemployment benefit, incapacity benefit and other benefits when combined with jobs in the black economy combine to produce nett incomes when housing benefit is factored in that makes traditional blue collar work in the official economy not pay.
Worse, when faced with the choice of competing with Eastern Europeans for these jobs the indigenous population sees these jobs as “beneath them” and choose to stay in bed and not do them.
4)Cutting these benefits will result in more growth in the black economy and a rise in crime, both of which have already occurred.
In Peterborough, for example, the rise in reported shoplifting, shrinkage, thefts of copper, swindling and benefit fraud was 35%, a phenomenon being repeated all over the country at different levels.
Already as a nation the number of heroin addicts has reached 8 million people with an increase of 6 million from the time America and the UK invaded Afghanistan 11 years ago following 9/11, overthrew the Taliban and began the “War on Terror”.
Each addict (many of whom are out of work) lives on average just 8 years but often requires housing benefit, council tax benefit and the resources of the NHS whilst they live.
5)The economy has averaged 1.4% GDP growth since 1946 (Source:Andrew Dilnot former head of the Institute of Fiscal Studies) yet 3% is necessary for full employment.
6)The Government has done nothing to stimulate inward investment on the scale needed and has not to this day understood the urgent need for manufactured exports to countries outside of the EC.
In fact the Irish Republic, an economic basket case and vassal state of Mrs Merkel’s Germany is the UK’s biggest export market!
A4E AND THE WORK PROGRAMME PROVIDERS
The Work Programme providers are being paid by results and are expected to place 30% of their charges. So far even the fabulously wealthy and talented Emma Harrison, the Founder of A4E, with an estimated personal fortune of £75 million gbp,has failed to place even 10% of these Work Programme participants yet A4E is doing better than SERCO and all the other providers.
The economy is set to worsen and still the numbers of unemployed continue to rise whilst the banks rebuild their balance sheets and fail to lend.
For all these reasons and a lack of political will the WORK PROGRAMME as now constituted is doomed to fail and I can see civil disorder as soon as the weather gets warmer unless the UK does something different or a limited war breaks out in the Persian Gulf with Iran and Syria requiring conscription.
WHAT TO DO
First their has to be a recognition of the problem by the Coalition and the Great and the Good.
Secondly, there needs to be a programme of export led growth and fast language training with a quadrupling of the export salesforce across strategic industries.
Thirdly we need road building and selected public works to create blue collar employment and real ancillary jobs.
Fourthly we need enterprise creation and a National Investment Bank plus new banks to compete with the existing High Street Clearers.
Fifth we need to eliminate outmoded institutions and create inward investment
John, many thanks for your detailed response.
It’s all very well to say that the UK’s big businesses and the Public Sector should employ the cream of the UK graduate output – the reality is that big busineses are not interested in employing the graduates. Big business has downsized, outsourced and offshored.
The jobs that are created by the UK’s big businesses are an insult to intelligence of the UK’s educated youth.
Another point is that the quality of the average degree has seriously dimished over the last thirty years, so perhaps we agree that it would be right for the UK Government to “encourage” graduates into becoming self-employed.
I broadly agree with your concluding recommendations.
However, I think that you miss an important opportunity. As a national, we have invested in the education of the unemployed youth and this now needs to be recovered. Here are two more suggestions:
1. Encourage unemployed graduates to find work overseas – this way they will not become a burden on the state and will eventually start repatriating funds. The UK needs to encourage emigrationas a policy opportunity.
2. Invest in non-military national service programmes.